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China Allows Short Selling and Margin Purchases


Sept. 26 (Bloomberg) -- China's cabinet agreed to let investors buy shares on credit and sell borrowed stock to help develop Asia's second-largest market after prices and trading volumes slumped, an official familiar with the plan said.

China's government is betting the changes will boost trading without spurring further declines after state share buybacks helped the CSI 300 Index rebound from a two-year low.

China has scrapped the tax on stock purchases and relaxed company buyback rules to help support the world's second-worst performing stock market this year.

The CSI 300 rose 0.9 percent today and added 8.2 percent this week, the first weekly gain in nine weeks.

6 Comments:

Anonymous said...

Hey! Why isn't anyone here celebrating this move by China? I mean, haven't they saved the free market as we know it? No one here wants to celebrate this? After all of the moaning about the short selling ban (which really doesn't exist with a SYNTHETIC PUT - buy a put short a call, same strike and month) you would think that certain people would be ecstatic about this move!!!
I guess all of the lemmings are out with the tide.

Trading Goddess said...

Hello Mr. Vader,

Could you tell me who exactly you think the "lemmings" are?

Thanks in advance.

John C. Lee said...

the timing is kinda strange. China removes its ban when all the other industrialized countries put them on? Seems like there's other motivation than just to "help develop Asia's second-largest market".

Leonard The Monkey said...

Looking at the Baltic Dry shipping Index, collapse in commodities and the destruction of all the great infrastructure stocks it doesn't look like China is ready to save anyone at the moment.

Anonymous said...

Lemmings = anyone (not you TG)that simply repeats what every other financial website / blog is stating at the moment. The shout du jour the last couple of weeks was the short selling ban. Now that we have a country remove the ban, those same people, you know who you are, are no where to be found.
Having the courage to post your OWN opinion instead of parroting everyone else's is respectable. Not doing so, makes you a lemming.
See TG, you thus far have stayed out of the fray and just continue to do your thing - post your picks and your pics. You have skin in the game. I respect that and I respect that you actually post your stock picks and thoughts that are original. Trust me, I read over 20 different sources daily.
Those who were complaining about the short rule did NOT have any skin in the game which is evidenced by the fact that they have continued to remain mute on my question on how many stocks on the list they were short. Also, they have ignored the fact that you can buy a put and sell a call and be short.
I wonder if the same people who were posting the "original" thoughts of the short rule were also up in arms when the uptick rule was revoked. Or how about when we went to decimalization? Decimilation did more to increase volaitilty and decrease liquidity than any other single act. I am sure you understand TG that it has to do with making a market and spreads and profits but the lemmings I am sure do not. I don't really care about offending them because this is a free market website, right?
The reason I come to this site is for the free market exchange of unique ideas. If all someone is going to do is post what can be found on CNBC, Fox NEWS< Drudge et al, than in my opinion, they are lemmings.
IF you have no skin in the game, you are not in the game. So those people should just be happy to sit in the stands and watch.

Trading Goddess said...

Darth,

Thanks for the explanation.

I have never "shorted" a stock, except for a few Puts and being in the inverse funds, like QID, for example.

It seems to me that many are in favor of re-instating the uptick rule.

I will tell you this... I will never know all there is to know about the stock market, and I learn something new all the time.

We all do.

Thanks again for stopping by and taking the time to post your thoughts and opinions. It is appreciated.

P.S. Yes, this is a "free" blog. Everyone here contributes their time and experience here so that others can become more knowledgable and profitable in the stock market.

And we can also learn from the readers as well.

Thanks again.

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